City expects $37.5 million budget surplus this year, O'Malley says

April 14, 2005|By Eric Siegel | Eric Siegel,SUN STAFF

Baltimore is projecting a $37.5 million budget surplus for the current fiscal year and will direct about a third of that money into programs to benefit children, Mayor Martin O'Malley announced yesterday.

The surplus -- largely the result of an increase in revenues related to the boom in the residential real estate market -- amounts to about 2 percent of the city's operating budget for the fiscal year that ends June 30.

The money is separate from the $70 million increase in locally generated revenue contained in the budget for next fiscal year, beginning July 1, that the mayor unveiled last month along with plans for the first of five annual 2-cent cuts in the property tax rate.

Among the youth-oriented programs slated to receive additional funds -- some of which may not be spent until next year -- are school-based after-school programs, $3.4 million; the Enoch Pratt Free Library, $1.5 million; and programs for at-risk teens and summer jobs, $1 million each.

Also included is $3 million for enhanced school maintenance, part of a previously announced agreement with the school board under which the city assumes responsibility for the upkeep of aging school buildings.

"These are one-time dollars. They are not yet recurring. But [the money] does come at a fortuitous time," O'Malley said at a news briefing.

About two-thirds of the surplus comes from higher-than-expected revenues from housing sales, mostly from real estate transfer and recordation taxes, officials said.

Other jurisdictions around the state are also experiencing budget surpluses, but the situation is a rarity for Baltimore, which imposed a package of new and expanded taxes a year ago to close a budget gap.

O'Malley portrayed the surplus as the payoff for five years of increased emphasis on making the city cleaner and safer, and diversifying the tax base.

"By improving the quality of life, we've been able to expand the [tax] base, reduce the [property tax] rate and invest in the future of our children," the mayor said.

The announcement of the surplus could fuel the desire of some City Council members to look at rolling back some of the taxes imposed last year. But Council President Sheila Dixon, who joined O'Malley in making the announcement, predicted broad support for the mayor's priorities.

"Every district in the city will benefit from the funds going to all these programs," Dixon said. "I doubt if many of my colleagues oppose employing more children this summer."

Many of the funding increases represent significant boosts for those programs. For example, the additional $1 million for children's summer jobs programs and Operation Safe Kids, an intervention program for troubled teens, represents a doubling of funds for those programs.

In addition to programs benefiting children, the O'Malley administration is earmarking $4.6 million to buy new police cars and heavy-equipment vehicles used by the public works department; $1 million to spruce up the trash-laden area along the Amtrak line in East Baltimore; and $500,000 apiece to expand job programs for ex-offenders run by the city's Office of Employment Development and to help attract more conventions to town.

Seven million dollars of the surplus will go to increase the city's reserve fund, an addition of about 15 percent, officials said.

Surplus highlights

Some highlights of Mayor Martin O'Malley's plans for spending an expected $37.5 million budget surplus:

$3.4 million for school-based after-school programs

$1.5 million for book purchases and repairs for the Enoch Pratt Free Library